By BEN LEFEBVRE

HOUSTON—The U.S. shale-oil and natural-gas boom has cracked open another lucrative market—gas liquids used to make plastics.

The same drilling technologies that have unlocked vast amounts of crude and natural gas from previously unproductive shale formations across the U.S. also are reaping large stores of ethane, propane and butane, known as natural-gas liquids.

This growing bounty has resuscitated the U.S. petrochemical industry, which just a few years ago was being strangled by the high costs of the raw materials.

Processing ethane into chemicals is 50% cheaper than using crude oil-derived naptha and its availability has made U.S. petrochemical companies the envy of overseas competitors. It also brings the prospect of lower prices for auto parts, Styrofoam and other products.

"Now there's tremendous growth in natural-gas liquids, with more growth seen on the horizon," said Adam Bedard, senior director at analysis firm Bentek Energy.

The boom has turned into a potential profit center for oil-and-gas producers, as well as for the pipeline companies that transport the fuel. Demand for ethane grew to about 933,000 barrels a day during the first half of 2011, up from 812,000 barrels a day in 2009, according to Bentek Energy. But like the other fuels extracted from remote shale deposits, the biggest problem is how to get it to facilities that can process it.

A dearth of pipelines created a bottleneck that drove the price that petrochemical companies pay for ethane to 95 cents per gallon in the third quarter, from 60 cents at the start of the year, said Dow Chemical Co. Chief Executive Andrew Liveris. But even with that price spike, chemical companies prefer ethane over other chemicals, he said.

"Ethane is still by far the preferred feed here in the United States and is much more cost-competitive than all of its equivalents," Mr. Liveris said during a conference call with investors.

To free up the flow of natural-gas liquids, about 12,000 miles of pipeline needs to be built by 2035, costing $14.5 billion, according to data from the Interstate Natural Gas Association of America, a trade association.

Until those pipelines are built, higher production will make the market volatile as short-term fixes such as rail transport are used, traders said. Even so, over-the-counter trading for NGLs has grown, said William Paul, head of natural-gas-liquid trading at Macquarie Energy.

"Over the last two years, the market has really evolved where you can trade further out on the curve," Mr. Paul said. "The bulk of that is driven by producers looking to hedge."

Some pipeline operators are working to expand their reach into oil- and gas-producing shale formations. Enterprise Products Partners LP is spending $7 billion on projects, spokesman Rick Rainey said. That includes a 280,000 barrel-a-day pipeline joint venture with Anadarko Petroleum Corp. and Enbridge Energy Partners LP and a wholly owned 125,000-barrel-a-day pipeline, both of which will transport natural-gas liquids from the shale formations in the Northeast and mid-continent areas to the U.S. Gulf Coast, where the bulk of the petrochemical companies are located.

DCP Midstream Partners LLC is also expanding its natural-gas liquids business, building two pipelines with a combined capacity of 350,000 barrels a day from the mid-continent and Texas to the Gulf Coast.

Even that new capacity may be tested. The INGAA expects the supply of natural-gas liquids to grow 2% each year for the next 25 years, while crude-oil supplies are forecast to increase 1.7% a year.

The growing supply of natural-gas liquid is also fueling the propane-export market, as countries in Latin America and Europe increase their take of the low-cost U.S. fuel used for cooking and heating. The U.S. shipped 134,000 barrels a day of propane overseas in September, a 28% increase year over year, according to the latest data from the U.S. Energy Information Administration.

On the other end of the pipeline, demand from petrochemical and plastics producers is expected to accelerate, with several companies planning large new ethane-processing plants, said Bill Waldheim, president of DCP's northern business unit.

The current plants already "can consume more than we can produce today," Mr. Waldheim said.